world''s largest retailer Wal-Mart Stores Inc and Sunil
Mittal''s Bharti Enterprises today announced the entry
of Wal-Mart in India with the signing of their equal
joint venture agreement that had been awaiting government
approval for the past several months.
wholesale retailing venture, Bharti Wal-Mart Private
Ltd, is a wholesale cash-and-carry and back-end supply
chain management, the two companies said, in line with
government of India guidelines that prohibit foreign
multi brand retail operators in the country, though
foreign single-brand retailers are allowed a 51-per
cent stake in joint ventures.
JV will open 10 to 15 cash-and-carry facilities over
seven years. The first of the stores, which will sell
groceries, consumer appliances and fruits and vegetables
to retailers and small businesses, is slated to open
in north India by the end of 2008.
addition, Bharti Retail, the 100-per cent subsidiary of Bharti Enterprises, that
will own and manage the retail stores, has entered into a franchise agreement
with Wal-Mart, which will provide technical support to Bharti Retail.
are delighted to partner with Wal-Mart for wholesale cash-and-carry and back-end
supply chain management operations in India," said Sunil Bharti Mittal, chairman
and Group CEO, Bharti Enterprises. "Wal-Mart''s global expertise in supply
chain and logistics will bring enhanced efficiencies across the retail ecosystem.
promises to bring great value to millions of farmers, artisans, small manufacturers
and retailers across India. We are pleased to be a partner in developing this
sector which is set to become a significant engine of India''s economic growth,"
cash-and-carry operations provide small retailers and business owners a wide range
of quality products at competitive wholesale prices that help them enhance their
businesses and profitability.
Bharti Wal-Mart business-to-business (B2B) wholesale cash-and-carry joint venture
will serve kirana (grocery shops) stores, fruit and vegetable resellers, restaurants
and other business owners. It also will serve other retailers such as Bharti Retail,
which is setting up a chain of stores in India that are 100 per cent owned and
operated by Bharti.
wholesale cash-and-carry venture will invest in setting
up an efficient supply chain and link farmers and small
manufacturers directly to retailers, thereby maximising
value for farmers and manufacturers on the one end and
retailers, and in turn, consumers on the other.
venture will support farmers and small manufacturers who have limited infrastructure
and distribution strength, and the supply chain will enable minimum wastage, particularly
of fresh foods and vegetables.
Duke, vice chairman, Wal-Mart Stores, Inc. said, "We are delighted that,
in Bharti, we have a well-respected partner who has a deep understanding of the
local market. Through our wholesale cash-and-carry joint venture, we will help
drive efficiencies across the supply chain and work towards the betterment of
India''s farmers, small manufacturers and retailers, in line with our global vision
of saving people money so they can live better. We would also like to leverage
our global scale to transform some of these suppliers into exporters with access
to our global markets over time."
first wholesale cash-and-carry facility is targeted
to open by the end of next year. Over the next seven
years, the venture is expected to open 10 to 15 wholesale
cash-and-carry facilities and
sell a wide range of fruits and vegetables, groceries
and staples, stationery, footwear, clothing, consumer
durables and other general merchandise items.
Wal-Mart Private Limited will bring modern supply chain and back-end logistics
expertise to India, bringing Wal-Mart''s global best practices in such areas as
just-in-time inventory, retail information systems, cold chain infrastructure,
GPS for truck and trailer tracking, and fuel management systems.
Bharti Mittal, managing director, Bharti Enterprises, said, "Creating a strong
back-end infrastructure will be one of the critical components in the development
of modern retailing in India. This partnership is committed to bringing in world-class
processes and technologies in the area of supply chain, logistics and cold chain
that will be bring immense value to retailers, both big and small, across the
country and ultimately benefit the entire retail ecosystem through better quality,
and more choice at better prices."
Jain, country president for Wal-Mart''s operations in India, will oversee the India
joint venture. He said, "One of the key reasons for Wal-Mart''s international
success is the fact that in every location where we operate, we are local. We
source local products from local suppliers that appeal to local tastes, needs
a wholesale cash-and-carry business, our endeavour is to work with and develop
local suppliers and create local beneficiaries along the supply chain. It is our
hope that big and small retailers and businesses will be our customers, take advantage
of the efficiencies we provide and derive significant benefits for their businesses,"
multi-brand retailers like Wal-Mart are limited to cash-and-carry,
or wholesale, and franchise deals, in an effort to protect
the small kirana shops across the
country, which make up the bulk of the Indian retail
sector, estimated at at nearly $350 billion.
The sector is projected to double in size by 2015, with
modern retail expected to expand its market share exponentially
from 3 per cent now.